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Setting price rates per project?

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Forum topic by Shaneswoodcuts posted 01-26-2018 03:48 PM 826 views 0 times favorited 14 replies Add to Favorites Watch
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Shaneswoodcuts

15 posts in 147 days


01-26-2018 03:48 PM

Topic tags/keywords: money selling pricing

Hey, being new to this.. forum and a little over a year working with wood. 1) I hope I’m asking an appropriate question, but it is genuine curiosity. And 2) hope this question is in the right forum…

How do you go about setting prices for what you do? I do predominantly small kitchen stuff, butcher blocks, drawer organizers, wine racks, etc. I take into consideration, the cost of wood, and the time I put into, but I seem to be pricing myself into a hole. I do use exotic woods and we know those get pricey, but they’re beautiful! As far as a cutting board/butcher block, I try to make them “artful” and useable. I don’t think what I’m asking is unreasonable, but it seems as if I’m hit with shock every time. Example, I’m working on a board now with Walnut and Bubinga. It’s 12×18x2. I have $50 in wood in the board. it’s a simple edge grain striped board with round over edges, so I’ll have about 8-10 hours in it. I’m thinking $110 (basically $75/sq. ft. For an edge grain board) an end grain $100/sq. ft., And anything with checkerboard patterns or inlays and the price goes up from there. Does this seem unreasonable? Is there a formula or some type of explanation I can use to help?

Thanks so much!

-- Shane


14 replies so far

View Lazyman's profile

Lazyman

2043 posts in 1410 days


#1 posted 01-26-2018 04:31 PM

Everyone will tell you that you need to include your time in the cost if you trying to make money on it. Where or how are you trying to sell them? One problem may be that you are trying to sell high end items in a low end marketplace. Perhaps you just need to also make some items with lower cost materials that require less labor to produce. Either that or you will have to find ways to produce them more efficiently. If you want to stick with the more costly pieces you will have to figure out where to go to find buyers that will appreciate the materials and effort to produce those items.

-- Nathan, TX -- Hire the lazy man. He may not do as much work but that's because he will find a better way.

View Loren's profile

Loren

10476 posts in 3671 days


#2 posted 01-26-2018 04:32 PM

It doesn’t seem unreasonable to me but people
are accustomed to buying stuff made by giant
specialized machines and/or 3rd world labor.
Middle class people look at the Pottery Barn
catalog for what furniture should cost and they
often expect a neighborhood craftsperson to
be able to beat those prices.

FWIW I haven’t looked at a PB catalog in a long
time. I’m just making a point. If you want to
sell handmade goods and make money at it
you’ll have to find ways to reduce your costs
or increase the prestige of your product. I build
guitars from time to time, classicals. Builders
who make a living at it typically charge between
$4k and $6k per instrument as a base price. The
customer has to be genuinely under a spell of
desire to pay that kind of money when very nice
sounding guitars can be bought for a fraction of
the price. Resale value may be a factor and the
ego satisfaction of having something custom made
may be as well. I hope it makes a point though
about the emotional factor in getting higher prices
for handmade goods.

BTW, I don’t even bother trying to sell handmade
guitars. I occasionally get an inquiry I quote at
$2500 or so but I’ve never had anyone pursue the
matter further. It’s a tough market and I looked
at it years ago and decided I didn’t want to make
that my life.

View jonah's profile

jonah

1722 posts in 3322 days


#3 posted 01-26-2018 05:17 PM

Ten hours plus $50 in materials. You’re proposing to charge $110 for it, which values your time at $6/hr. You can make more bagging groceries.

Making money from woodworking requires you to a) reduce the time it takes to build things, or b) increase the price to where you are properly valuing the time you put into projects.

I’d start a nice looking exotic cutting board at $140 or so. If I thought I could only get $110, I’d find a way to spend less on materials and less time building it, or I wouldn’t bother doing it at all.

View Aj2's profile

Aj2

1424 posts in 1821 days


#4 posted 01-26-2018 05:36 PM

I sell cutting boards for 60$ around Christmas time. Any other time of the years no one is interested. If your going to pursue this woodworker dream thing decide if your going to be a craftsman or a artist. You cannot be both until you earn the right.
Good luck and stop giving away free work. :^]

-- Aj

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tomsteve

790 posts in 1242 days


#5 posted 01-26-2018 06:16 PM

something like cutting boards, the way to make money on them is production- make 5-10 at a time.
imo, this guy is the master at cutting boards
https://mtmwood.com
heres his youtube page
https://www.youtube.com/channel/UCWBTyvNhUXq0ofu6ta1EAaQ
many times in his vidoes you’ll see he is making multiples. if he only made one at a time, he would have to charge extremely high.

theres more than just materials and labor that should be determined, and even with materials, glues, sandpapers, finishes,etc have to be figured in. then theres overhead- the fixed expenses not associated with production- non labor expenses. things like utilities,rent, office supplies(pencils are an office supply),etc
then theres profit that has to be figured in.
it can get complicated, but thats a little how a business makes money.

simple, determine cost of materials- ALL of the materials used.
determine labor costs.
determine indirect costs.

View IantheTinker's profile

IantheTinker

237 posts in 150 days


#6 posted 01-27-2018 03:59 AM

Make sure you are trying to sell in the right market, batch boards together to improve efficiency and keep costs lower, and make sure you are selling something that people want. It might be better to build garden benches, coffee tables, farm tables (Homestead Craftsman on YouTube), wooden swords and shields (festivals), or child size rocking chairs. Guys I have seen be successful with your type of endeavor find out what is wanted or needed, and then build them accordingly. Sometimes they are seasonal items, such as selling garden benches in the spring. Find some simple, inexpensive items to build and try them out at local craft shows or craft fairs. That might help you figure out what is good and what isn’t.

Also, when figuring out pricing I like to consider whether or not the average person could build what I am selling. Because if they can do it relatively easily, then they probably won’t pay what I am asking. Best wishes!

-- “How you feeling, Roy?”... “a little unappreciated, Al...” - Die Hard

View Carloz's profile

Carloz

1147 posts in 615 days


#7 posted 01-27-2018 01:30 PM

Check out your local World Market, they sell similar stuff for basically price of wood.

View jeffswildwood's profile

jeffswildwood

3227 posts in 2000 days


#8 posted 01-27-2018 02:16 PM

I have a lot of times had people send me a picture of something on amazon and ask If I can make it. Let’s say $30.00 for the amazon price. I say sure, $50.00. They ask why so much? I explain that 1) it will be natural wood, not press board and 2) I don’t work in a mass produced factory. Usually they don’t order.

-- We all make mistakes, the trick is to fix it in a way that says "I meant to do that".

View tomsteve's profile

tomsteve

790 posts in 1242 days


#9 posted 01-27-2018 11:53 PM


2) I don t work in a mass produced factory. .

- jeffswildwood


and dont buy lumber by the train/boat load.

View IantheTinker's profile

IantheTinker

237 posts in 150 days


#10 posted 01-28-2018 01:42 AM


2) I don t work in a mass produced factory. .

- jeffswildwood

and dont buy lumber by the train/boat load.

- tomsteve

So many people think wood is cheaper than it actually is.

-- “How you feeling, Roy?”... “a little unappreciated, Al...” - Die Hard

View John Smith's profile

John Smith

993 posts in 186 days


#11 posted 01-28-2018 02:03 AM

Middle class people look at the Pottery Barn
catalog for what furniture should cost and they
often expect a neighborhood craftsperson to
be able to beat those prices.
- Loren

Loren – this strikes a personal chord with me.
a few years ago, my neighbor brings me over a page torn out of the Sears catalog
of a corner china hutch…. she says to me, “I know you can make it much cheaper out of real wood
because this is only particle board. and it costs a fortune”. I was speechless. I passed on the job.

but you are so right in your observations.

-- Graduated Valedictorian from the University of HardKnocks --

View tomsteve's profile

tomsteve

790 posts in 1242 days


#12 posted 01-28-2018 02:32 PM


2) I don t work in a mass produced factory. .

- jeffswildwood

and dont buy lumber by the train/boat load.

- tomsteve

So many people think wood is cheaper than it actually is.

- IantheTinker

if i didnt know any better, they see the price of a 1 by 6 construction grade pine board at the big box and make their assumptions off of that. if a 1 by 6 by 8’ is about $4, so oak,cherry,walnut,etc shouldnt be any more expensive.

View Mike_D_S's profile

Mike_D_S

478 posts in 2238 days


#13 posted 01-28-2018 04:50 PM

Shane,

Three comments. First, as noted by the guys above, efficiency is key. You have to fined a way to get faster per unit, whether that means making more than one at a time to divide out the machine setup time or find ways to be more efficient for the singletons. As an example, I find taking the time to cut the parts for an edge grain cutting board to width and thickness and then glueing up is a a lot more tedious than ripping the pieces to width but oversize in thickness and then planing the whole board to the desired thickness. Alignment becomes easier and I don’t worry about glue squeeze out as it’ll just get planed off.

Secondly, pick a walk line rate you are going to pay yourself per hour and be strict about it. Since wood working is my hobby and side business, my free time is important so I use $50/hr. Pieces that are interesting to me or give me chance to practice technique, go in the ‘hobby’ basket and I’ll go below that. But things like cutting boards, etc which are definitely in the business side have to deliver $50/hr. As a result, I don’t do many cutting boards as I’m just not that efficient at it, but I do quite a few drawer repairs as I can knock together a drawer box pretty quickly.

The third thing I’ll say is to build a basic item to show people along side the expensive one. Have a maple edge grain board to show people next to the fancy one. If you’re only showing them one cutting board, then the difference in the woods is less obvious and therefore the price may not be well supported. If you have the fancy one next to a basic one, then you create a differentiation the buyer can see for themselves.

Regards,
Mike

-- No honey, that's not new, I've had that forever......

View Shaneswoodcuts's profile

Shaneswoodcuts

15 posts in 147 days


#14 posted 01-28-2018 07:19 PM



Shane,

Three comments. First, as noted by the guys above, efficiency is key. You have to fined a way to get faster per unit, whether that means making more than one at a time to divide out the machine setup time or find ways to be more efficient for the singletons. As an example, I find taking the time to cut the parts for an edge grain cutting board to width and thickness and then glueing up is a a lot more tedious than ripping the pieces to width but oversize in thickness and then planing the whole board to the desired thickness. Alignment becomes easier and I don t worry about glue squeeze out as it ll just get planed off.

Secondly, pick a walk line rate you are going to pay yourself per hour and be strict about it. Since wood working is my hobby and side business, my free time is important so I use $50/hr. Pieces that are interesting to me or give me chance to practice technique, go in the hobby basket and I ll go below that. But things like cutting boards, etc which are definitely in the business side have to deliver $50/hr. As a result, I don t do many cutting boards as I m just not that efficient at it, but I do quite a few drawer repairs as I can knock together a drawer box pretty quickly.

The third thing I ll say is to build a basic item to show people along side the expensive one. Have a maple edge grain board to show people next to the fancy one. If you re only showing them one cutting board, then the difference in the woods is less obvious and therefore the price may not be well supported. If you have the fancy one next to a basic one, then you create a differentiation the buyer can see for themselves.

Regards,
Mike

- MikeDS

http://i50.photobucket.com/albums/f339/blowjazz/Mobile%20Uploads/IMG_20180128_123324920_zpsydvmh7d8.jpg

http://i50.photobucket.com/albums/f339/blowjazz/Mobile%20Uploads/IMG_20180128_123928866_zps6qtw6qx6.jpg

Gentlemen!!! Thanks so much for your help and input. I know I have to increase efficiency, that’s one thing I’ve been trying to do since I started this. These are two I did this weekend, along with a trip to woodcraft! I’m certainly not making excuses for my low prices, and being a lifelong musician, I’m not trying to undercut anyone’s business. That Burns me up!!! But, since I’m relatively new to this, I’m still trying to learn and as I get better and establish a little bit of a name, I’ll certainly start to charge more. I do this mostly as a hobby and more importantly, because I love it.

I’ve been thinking of ways to show people the difference in the boards and explain the time difference. That’s why one is end grain and one edge grain. The funny thing is, Mike, I did exactly what you suggested on the end grain board, before reading your reply! :-)

I really can’t that all of you enough for your help! I can’t believe I didn’t find this forum sooner!

-- Shane

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